United Airlines Announces Launch of Senior Se

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Quote: About 2 weeks ago United announced they are seeking bids for 100 seat aircraft....if the notes are for aircraft, logic would lead one to believe the money would go towards 100 seaters....not 70-90's, but in either case....ALL flown by mainline.


they better be
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Quote: I see two possibilities:

1. Using the money from this offer, United acquires 70-90 seat RJs to fill the void of the 737s and starts doing some "Mainline" RJ flying to actually serve smaller markets and grow the business. They make money, and are able to pay back the notes.

2. They blow the money and buy RJs for affiliated carriers, pay a "per departure" fee that actually makes it more expensive than Mainline, lose money, and start selling off routes, equipment, facilities, and shrinking the business.....

United became huge after profitting from Pan Am's blunder in a similar fashion. I hope it doesn't happen again, with UAL in the role of PAA.
These are corporate bonds secured by route authorities, etc. If they were financing aircraft they would use a EETC and the notes would be secured by the aircraft. EETC's would fetch a lower interest rate as the security is easier to dispose of in case of default. It wouldn't make any sense to issue general bonds to buy aircraft as you will most definitely pay a higher interest rate. This will be used to pay bills either current bills or past debt.
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Will anyone lender actually work with an EETC after United tried to void them in their last bankruptcy? EETCs had a lower interest rate when they were less risky. Since the latest rounds of bankruptcy, I'd guess that assumption is no longer a solid bet--and corporate bonds is all UAL can sell.

Past actions have consequences--something bankruptcy lawyers often forget.
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Quote: I guess I will type how y'all want it, MY GUESSES TO THE OP ARE:

1. UAL is RUNNING OUT OF MONEY, and if they CAN NOT raise capital, will file CH 11 AGAIN
2.They need CAPITAL for the 787/airbuses they claim to be adding to the fleet over the next few years
3. and this one I like the most, they want capital for the mergers/buy outs that Tilton is obsessed with seeing all over the US airline industry, IE UAL wants to merge with CAL, and this will require some serious CASH ON HAND

BASICALLY, the only thing that has keep UAL in business since 2002 is the fact they mortgaged everything they owned, basically putting them XXbillion in debt, which MEANS, all those creditors have spent twice as much as they originally gave them in hopes they recover and pay it all back

ITS LIKE, someone on a blackjack table that loses $500, after betting $50 a hand, and instead of walking away, starts betting $100 a hand in hopes of winning back what they lost.....double or nothin
#1 there is nothing to cut business-wise in Ch11 - it will liquidate if it goes that far.....it won't
#2 is off a bit........the initial cash deposit was small and deliveries won't even START until 2016.....

All things 787: United Airlines buys 25 787s and 25 A350
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Quote: Will anyone lender actually work with an EETC after United tried to void them in their last bankruptcy? EETCs had a lower interest rate when they were less risky. Since the latest rounds of bankruptcy, I'd guess that assumption is no longer a solid bet--and corporate bonds is all UAL can sell.

Past actions have consequences--something bankruptcy lawyers often forget.
United tried to crack the EETC's in Chapter 11 but they were unsuccessful. Delta has been successful in getting EETC's in the past two years at very favorable interest rates.
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Quote: Skywest never flew J-41's... You mean E-120's...

Very good post, by the way!
Lol, I live on the east coast, fine a few J41's from Dulles/ORD on that regional that is now an RJ airline out of IAD..from direction parts of the north east (buffalo, newberg, etc)
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Every time I read something about United leveraging even more of their assets, I keep hearing that Door's song:

This is the end
Beautiful friend
This is the end
My only friend, the end
Of our elaborate plans, the end
Of everything that stands, the end
No safety or surprise, the end
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Quote: Every time I read something about United leveraging even more of their assets, I keep hearing that Door's song:

This is the end
Beautiful friend
This is the end
My only friend, the end
Of our elaborate plans, the end
Of everything that stands, the end
No safety or surprise, the end
nice....the loss of thousands of front-line jobs...you know, people like you.
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Quote: nice....the loss of thousands of front-line jobs...you know, people like you.
I'm not making light of people losing their jobs. If you look at their financial data you will see that they are over 130% leveraged right now. In case you don't know, that's not good. The more you leverage, the harder it gets to overcome the debt. Of course I wouldn't expect many people in this country to understand that since most are in debt up to their ears.
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There seem to be a lot of experts that are saying United is among (if not the) best positioned airline when the economy recovers. After all, last time the economy was roaring (late 90's), which airline was doing the best?

It doesn't bother me one bit when people underestimate it. It just further undervalues the stock price, and allows people who are smart to profit from the success of a good airline.
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